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    Types of Annuities

    Variable Annuities Explained

    Variable annuities invest your money in market subaccounts and can include optional living-benefit riders — offering growth potential along with optional income guarantees.

    Investor reviewing variable annuity subaccount performance
    Variable annuities combine market participation with optional income riders.

    What Is a Variable Annuity?

    A variable annuity invests your premium in a menu of subaccounts (similar to mutual funds). Your account value rises and falls with the market. Optional riders may guarantee lifetime income regardless of how the underlying investments perform.

    How They Work

    You select subaccounts based on your risk tolerance. Earnings grow tax-deferred. Optional Guaranteed Lifetime Withdrawal Benefit (GLWB) riders can guarantee an income base that grows even if your account value doesn't.

    Pros

    Market growth potential, tax deferral, optional lifetime income guarantees, and a death benefit are common features.

    Cons & Costs

    Variable annuities can carry higher fees than other annuity types — mortality & expense charges, subaccount fees, and rider charges. Account values can drop in down markets.

    Who Variable Annuities May Fit

    Investors comfortable with market risk who still want optional guarantees on lifetime income, and who plan to hold the contract long-term to justify the fees.

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